Conducting Music's Digital Shift; A Top Lobbyist Seeks Harmony In a Time Of Discord

On a muggy Thursday morning in Washington the week before last, the recording industry lobbyist Hilary Rosen was in her Dupont Circle office doing what she does so well: working the phones.

A bill had been introduced in the House that would force big recording companies that license music for sale to their affiliated Internet sites to make the music available to other sites under the same terms. It was a move the big companies had opposed. And Ms. Rosen, no stranger to fierce political wrangling, was quick to size up who would be her best political allies.

One of her first calls was to Jack Valenti, the head of the Motion Picture Association of America, whom lawmakers both fear and respect. After a brief chat (''I thought The New Yorker piece on you was really good,'' she told him) she not only secured his support, but Mr. Valenti agreed to ask another group to send a letter to lawmakers on her behalf. ''So your staff is going to take care of that?'' she asked, leaning back in her chair and placing her feet on her desk. ''Great. See you, babe.''

It is no wonder that some in Washington call Ms. Rosen ''the other Hilary.'' Like the former first lady and junior senator from New York, Ms. Rosen is a political operator who cannot seem to escape controversy. And this fall Ms. Rosen may face her biggest challenge yet in the 14 years she has worked for the Recording Industry Association of America, the lobbying group that represents the political interests of the $15 billion industry.

Recording companies are being attacked on all sides. Consumers complain that the industry has been too slow to offer full-fledged online music services. Antitrust officials here and in Europe are investigating whether the labels used their market dominance to keep online competitors at bay by cutting sweetheart licensing deals for their own recently announced online ventures. Disaffected musicians argue that executives place profits ahead of artistic freedom. And lawmakers on Capitol Hill and California are stepping up their scrutiny of various industry practices -- including whether contracts are unfair to musicians.

All the while the industry's sales are flagging. The dollar value of music sales dropped 5 percent in the first half of 2001 compared with the first half of 2000, according to figures the association plans to release today. Product shipments, including compact discs and tapes, have plummeted 9.8 percent.

And so Ms. Rosen finds herself the voice of an industry that lately has few admirers. Yet, even some of her most outspoken critics, including Christopher B. Cannon, a Republican of Utah who sponsored the House bill Ms. Rosen opposes, marvel at her political acumen.

''I like people who play, and she's a player,'' Mr. Cannon said. (This, from a man who wrote recently on his Web site, ''Hilary's call for deregulation of the music industry has about as much credibility as Saddam Hussein calling for America to be kicked off the United Nations Human Rights Commission.'')

With a budget of $43 million and the backing of the big record labels that distribute 90 percent of the music sold in the United States, Ms. Rosen is indeed a player. On that recent Thursday, Aug. 9, Ms. Rosen had a meeting at the Hay Adams Hotel, a Washington power breakfast spot, with a top executive from the Universal Music Group, a unit of Vivendi Universal. They discussed recent arbitration hearings regarding how much Webcasters should pay recording companies for the right to stream music over the Internet.

Afterward, in her office, she read in Variety that Pamela Horovitz, the president of the National Association of Recording Merchandisers, threatened to support Mr. Cannon's legislation. Ms. Rosen was annoyed that Ms. Horovitz, whom she said she had known 15 years, had not called her first.

Turning to her keyboard, she began typing an e-mail message. ''Dear Pam,'' she read aloud, rolling her eyes, ''Is your phone broken?'' Then Ms. Rosen thought better of the sarcasm, deleted it, and composed a more measured message, asking Ms. Horovitz, ''Why fan the flames on these issues so divisively?''

To round out the day, in a conference room that afternoon she met with Mark McKinnon, a strategist working on the industry's behalf, who had just come from a White House meeting about music piracy.

It is some ways remarkable that Ms. Rosen, a 42-year-old socially progressive, straight-talking lesbian, would become the voice of the music industry. For it is still largely an industry with a reputation for paranoia and rampant egotism -- traits few associate with Ms. Rosen.

And unlike many of the quirky executives she represents, who started out reading sheet music or drafting record contracts, Ms. Rosen is at home with the politicos and the news media. That may be why music executives pay Ms. Rosen more than $1 million a year to speak for them.

''She is passionate,'' Doug Morris, chairman of the Universal Music Group, said of Ms. Rosen. ''I love that she is the representative of the industry.''

And Ms. Rosen seems more than comfortable with the industry she represents. ''Everybody's a little weird,'' she said. ''Everybody has their stuff. This is an industry full of characters and, I guess, I am one more.''

Love for Music And Politics

Ms. Rosen was born in West Orange, N.J., in 1958. Her father was an insurance agent and her mother the town's first city councilwoman.

Even as a youngster she had a knack for politics, spending hours on the telephone during her mother's campaigns, drumming up votes. ''No one knew she was 13 years old,'' her mother, Gayle Jacobs, recalled. ''She did it quite well.''

She also liked pop music, and one of her most memorable concerts was at Radio City Music Hall the night in 1972 that James Taylor announced he had married Carly Simon.

After high school, where she had been student council president, Ms. Rosen headed for the nation's capital. She studied international business at George Washington University, dreaming of someday becoming chief executive of a Fortune 500 company.

But in Washington, where she worked part-time as a bartender, she said her studies took a backseat to turmoil in her personal life. First, her parents divorced, and then Ms. Rosen told her family and friends she was gay.

After graduating in 1981, instead of becoming a business executive, she began learning the business of Washington, working as a lobbyist and consultant. Along the way, she was involved in a handful of music-related issues, like whether compact discs should be rented at stores.

She came to know Jay Berman, then head of the Recording Industry Association of America. And in 1987, when Mr. Berman was preparing to move the group from New York, he hired Ms. Rosen to help set up the Washington office. He would become her advocate and mentor, as well as a close friend who prepared Ms. Rosen to take his job.

''I told Jay I did not aspire to be a lobbyist,'' she said. And if it had been anything other than music, she added, she would have probably said no.

At the trade association, Ms. Rosen was a force behind several key projects, helping co-found Rock the Vote, a nonpartisan voter-registration drive for young people, in 1992. And she helped have the controversial Digital Millennium Copyright Act passed in 1998, over the resistance of opponents who still contend the legislation placed a higher premium on intellectual property rights than freedom of information.

Gaining a Partner And 2 Children

As Ms. Rosen's career developed, so did her personal life. In 1994 she met Elizabeth Birch, a lawyer for Apple Computer. The two women eventually became a couple, and the next year Ms. Birch -- who counts Al and Tipper Gore among close friends, as does Ms. Rosen -- moved to Washington to head the Human Rights Campaign, the nation's largest organization of lesbians and gay men.

Two years ago, Ms. Rosen and Ms. Birch adopted twins, a baby boy and girl from Texas -- a move publicly criticized by conservative groups there that oppose adoptions by same-sex couples.

It was in 1996 that Mr. Berman, near retirement and looking for a successor, approached various recording executives about Ms. Rosen. Some balked, he recalled, because they thought she was too young. Finally, the recording companies agreed to give Mr. Berman's protégée two years to prove herself, naming Ms. Rosen president and chief operating officer.

''I think Jay thought I deserved it,'' Ms. Rosen said. Later, so did the recording companies, which in 1998 promoted her to chief executive.

She could not have ascended at a more tumultuous time. The online music revolution had exploded and critics complained the recording industry was slow to respond. Napster, at first an obscure music file-swapping service, became enormously popular as millions of people discovered it was not only easy to use but enabled users to share music without the inconvenience of paying for it.

The association tried to stem the tide by suing Napster in 1999 on behalf of the recording companies, saying that musicians were being harmed because they were not paid for copyright material.

Critics wondered why the recording companies did not counter Napster more directly by devising an online distribution system of their own. But the companies, Mr. Berman said, ''were putting pressure on Hilary to do as much as humanly possible from a legal perspective to give them time to figure it out.''

Last February, the association scored a victory when a judge ruled in favor of the industry, essentially quashing Napster. Other free file-swapping services have emerged, but many online music distributors that have tried to create copyright-abiding businesses have either merged or have closed their doors.

Only now are the five major record labels close to rolling out their own online subscription services. One is MusicNet, a partnership of AOL Time Warner, BMG and EMI. The other is PressPlay, a venture of Sony and Universal. Both are scheduled to begin operating next month.

But Napster was not Ms. Rosen's only battle. In November 1999, she successfully lobbied legislators to include a controversial amendment in an unrelated budget bill. The amendment placed sound recordings in a category of copyrighted materials known as ''work made for hire.''

Music companies typically hold the copyrights to recordings. But under a 1976 copyright law, the copyrights were to revert to the musicians after 35 years. The only exception was for works expressly made for hire -- that is, material the author or artist creates as an employee of the company that produces it, like music compilation albums. In works for hire, the producing company retains the copyright as long as it remains in effect, which under current law is generally 95 years.

Ms. Rosen's amendment, which passed along with the budget bill, was meant to remove any ambiguities by stipulating that recordings were works for hire -- something already provided for by most recording contracts. She argued that the issue was merely a technical fine point, made not to take rights from artists but to clarify the recording companies' copyright status in the current environment.

But muscians saw it otherwise and rebelled, with much of the anger directed at Ms. Rosen.

''It was a major change,'' said Jay Cooper, a prominent music lawyer whose clients have included the former Eagles singer Don Henley.

Eventually, Congress restored the 1976 proviso, allowing copyrights to revert to the musicians after 35 years. But many artists remain wary.

''I don't want to know if she is a good person or not,'' said Jenny Toomey, executive director of the Future of Music Coalition, a recently formed group in Washington that hopes to promote artists issues. ''There is a history of power folding the opposition into them. There is nothing to be gained by making friends with Hilary until we, too, are in a position of power.''

Industry executives, who argued that they had supported the amendment at Ms. Rosen's urging, say the debacle was one of the first times they had questioned her judgment. But industry critics see it as more a matter of Ms. Rosen's being a hired gun who sometimes does her job too well. ''The recording companies are the ones pulling the strings,'' said Mr. Cooper, the lawyer.

For her part, Ms. Rosen said that once she realized how angry artists became, she helped resolve the situation. ''I understand they felt betrayed,'' she said. ''But I, too, felt betrayed by them. A lot of inflammatory stuff was said, and it got personal.''

Coming Under Fire From Many Sides

Embattled may be an appropriate word for Ms. Rosen these days. On her office floor, near the desk, is a framed caricature produced by the trade magazine Hits. It depicts Ms. Rosen dressed for war, complete with steel helmet, cigar dangling from her crimson lips and a machine gun in her left hand.

The association has become such a target of scorn for free-music zealots that staff members, fearing harassment, no longer go out in public wearing T-shirts with record company logos. And Ms. Rosen says she has even received death threats.

''It strained credibility for me to think that someone would hurt us over free music,'' Ms. Rosen said. The staff has become so wary that one young assistant said he feared losing his job if he transferred a call to Ms. Rosen without permission.

Earlier this year she considered quitting altogether. As a new parent she wanted to spend more time with her children, she said. But associates say she was also seeking more support from the recording companies.

''I think she was suffering from overexposure and was worn out,'' Mr. Berman said. ''Feeling a little like 'where are my troops?' she was wondering how close they were behind her, or how far.''

She finally agreed to stay for at least a few more years. ''I think some people think this is a holy quest,'' Ms. Rosen said of the battles still to be fought. ''But it's about making money.''

Little of this seemed to matter, though, when Ms. Rosen, Ms. Birch and some friends attended the Madonna concert in Washington nine days ago.

Ms Rosen had three extra tickets, one of which she gave to her driver. Ms. Birch suggested that they give the other two away to a couple standing outside the arena. Ms. Rosen agreed, and a short time later, as the couple bounded down the steps to their seats, they turned to Ms. Rosen and gushed their appreciation.

Ms. Rosen smiled and listened, not telling them where she worked. There was no talk of Napster or licensing agreements or piracy. Instead, as the lights went down in the arena, Ms. Rosen was just another music fan in the fourth row.